Convergence to a digital platform
ING Group Investor Day 2016
Roel Louwhoff, Chief Operations Officer &
Chief Transformation Officer ING Group
Amsterdam • 3 October 2016
Key points
• ING has an unprecedented opportunity to create one digital platform for financial services
• We will move towards a globally scalable banking platform
• Convergence will enable faster time-to-market and improve IT efficiency through re-usable
components and smarter use of data
• Process improvements and standardisation will further improve the customer experience and
increase revenues
• Delivery of our transformation is a Board priority
• Our investments in the digital banking transformation will generate structural cost savings
2
ING has an unprecedented opportunity to create one digital
platform for financial services
ING customers are becoming
digitally native
Technology shapes business
opportunities
ING retail contacts (total ING Bank)
Mobile
+57%
4Q14
Web
2Q16
+2%
4Q14
2Q16
ING retail contacts per channel 2Q16
47.1%
Mobile
Web
Branch
Call
3
50.9%
ING is in prime position to stay a
step ahead of its peers
Embracing technology to enrich
customer experience:
• Strong Omnichannel sales and
service model
• From product-centric to
customer-centric
• Frictionless and personal digital
experience
• Data analytics and personalised
interactions
+
Constructing one pan-European
financial platform for customers:
• One customer proposition
• Innovative services beyond
traditional banking
• Go-to place for all financial needs
• Offering complete personal
financial picture
We will move towards a globally scalable banking platform
Empowering people to stay a step ahead in life and in business
The ING brand
Creating a differentiating customer experience
Market Leaders
“Orange Bridge”
• Best-in-class Omnichannel
proposition
• Largest bank in the Benelux
• Intention to move to
integrated universal
banking platform in
Belgium and Netherlands
1
Challengers
“Model Bank”
• Best-in-class digital
financial platform
• Expanded product and
digital capabilities
• Leverage scale across 5
countries
2
Germany
“Welcome”
• Best client experience and
best offer principle
• Banking platform open for
non-clients and 3rd parties
• Supported by
standardisation and
automation
3
4
Wholesale
“WB TOM” (already running)
• Digital platform to
empower clients
• Single global platform for
wholesale clients
• Front-to-back process
improvement
Laying the foundation for further convergence
Global Data
Management
Global Process
Management
ING
Private Cloud
Modular
Architecture
Bank-wide
Shared Services
Support Function TOMs*: Finance, Risk, HR, Procurement, IT
All projects described are proposed intentions of ING. No formal decisions will be taken until the information & consultation with the Work Councils have been properly finalised.
Subject to regulatory approval. * TOM = Target Operating Model
4
Convergence will enable faster time-to-market and improve IT
efficiency through re-usable components and smarter use of data
• Integrated single customer view and insights
Data
Management
Data Management
Data Infrastructure
• Leveraging internal and external data, enabling new customer
solutions
• Meeting (regulatory) reporting requirements more easily
95% of core data
in standard terms
• Providing foundation to move to globally scalable platform
• Common components for targeted personalised solutions
Modular
Architecture
• Scaling fast via global propositions and leveraging local
capabilities and developments
• Integrating easily with (global) third parties
80% of globally
scalable
components
available across
countries
• One ING Private Cloud as foundation for agile and digital banking
ING Private
Cloud
5
• Easy, efficient and instantly available infrastructure services
• Enabling faster time-to-market for new services
• Optimising IT infrastructure landscape and cost base
10x faster
deployment time:
from days to
minutes
Process improvements and standardisation will further improve
customer experience and cost efficiency
Global
Process
Management
• Improving customer experience and increasing revenues
through faster delivery at higher quality, e.g. instant lending
• Rigorous global process management framework implemented
• Simplifying and digitising processes – leveraging robotics
50% faster
delivery times
• Keeping what is core and strategic
Bank Shared
Services
Business
Support
Functions
6
• Sharing what is non-core or can be done better by
others/elsewhere
• Delivering higher productivity, lower costs and improved control
• Implementing global operating models to drive consistency
and efficiency across countries and functions
• Optimising value-add to the business
• Delivering substantial savings in procured external spend
4 centres
offering 24/7
IT & OPS support
20-25%
efficiency
improvement
Delivery of our transformation is a Board priority
ING Strategy
Governance model
Transformation Themes
Management
Board Banking
Change
Investment
Committee (CIC)
Global
Transformation
Office (GTO)
Other
Governance
Bodies (EAF, TSB*)
Portfolio
Teams
Transformation
Delivery Team
Transformation KPIs
Orange
Bridge
Model Bank
Welcome
Every project is aligned to
one or more themes
Performance Reviews
WB TOM
Global Programmes
* EAF: Enterprise Architecture Forum and TSB: Technology Standards Board
7
ING strategy defines
transformation themes
Key milestones of projects
are linked to objectives
Milestones are delivered
within 90-day cycles
Our investments in the digital banking transformation will
generate structural cost savings
Investments* of ~ EUR 800 mln over 5 years
(in EUR mln)
Annual gross cost savings of ~EUR 900 mln by 2021
(in EUR mln)
600
900
400
600
200
300
0
0
2016
2017
Orange Bridge
WB TOM extension
2018
2019
2020
2021
Model Bank and Welcome
Other initiatives
2016
2017
2018
Orange Bridge
WB TOM extension
2019
2020
2021
Model Bank and Welcome
Other initiatives
* Defined as incremental expenses from new announced programmes and includes project expenses, depreciation and amortization of new IT assets, as well as impacts from
impairments of legacy IT systems and other assets. All projects described are proposed intentions of ING. No formal decisions will be taken until the information & consultation with the
Work Councils have been properly finalised. Subject to regulatory approval.
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Important legal information
ING Group’s annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the
European Union (‘IFRS-EU’). In preparing the financial information in this document, except as described otherwise, the same
accounting principles are applied as in the 2015 ING Group consolidated annual accounts. All figures in this document are
unaudited. Small differences are possible in the tables due to rounding.
Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future
expectations and other forward-looking statements that are based on management’s current views and assumptions and involve
known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those
expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements
due to, without limitation: (1) changes in general economic conditions, in particular economic conditions in ING’s core markets, (2)
changes in performance of financial markets, including developing markets, (3) consequences of a potential (partial) break-up of the
euro, (4) potential consequences of European Union countries leaving the European Union, (5) changes in the availability of, and
costs associated with, sources of liquidity such as interbank funding, as well as conditions in the credit markets generally, including
changes in borrower and counterparty creditworthiness, (6) changes affecting interest rate levels, (7) changes affecting currency
exchange rates, (8) changes in investor and customer behaviour, (9) changes in general competitive factors, (10) changes in laws
and regulations, (11) changes in the policies of governments and/or regulatory authorities, (12) conclusions with regard to purchase
accounting assumptions and methodologies, (13) changes in ownership that could affect the future availability to us of net
operating loss, net capital and built-in loss carry forwards, (14) changes in credit ratings, (15) ING’s ability to achieve projected
operational synergies and (16) the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V.
(including the Risk Factors contained therein) and ING’s more recent disclosures, including press releases, which are available on
www.ING.com. Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and, ING
assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for
any other reason.
This document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States or any
other jurisdiction.
www.ing.com
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